EV Interest is Up, But Supplies Are Down

With gas prices spiking to new levels and future summer road trips on the horizon, you may be asking if now is the right time to buy an electric vehicle (EV)? Maybe. While Energy Fairness has enthusiastically supported EV adoption for years, the decision to take the plunge can be complicated. 

Car prices, along with gas prices (and the price of just about everything else!), has skyrocketed in recent months. However, with the price of fuel edging closer to $5 per gallon, many consumers are shopping for EVs to offset fuel costs. Studies indicate that the ownership costs of EVs are often lower long-term than gas-powered automobiles. Still, the initial investment can be challenging. 

EVs cost as much as $15,000 more than a standard gas-powered vehicle. That’s a significant difference, especially for low-income buyers who may not have the ability to pay as much upfront. The vast majority of new vehicles are financed, and the number one factor purchasers look at is how much the monthly payment will be. Even if the costs work out long-term, the sticker shock can be daunting to many consumers. 

Another issue holding buyers back? The lack of charging infrastructure. In fact, “range anxiety” is the second primary reason car buyers choose not to invest in EVs. Fortunately, last year’s bipartisan infrastructure package included $7.5 billion in new funding for charging stations, but it could be several years before charging is widely available. 

Consumers who decide to take the plunge and buy their first EV face another challenge: finding one. 

Global shortages of computer chips and rare earth minerals for new automobiles have caused a massive supply crunch. Inventories are 40% lower than last year and it could be months before supplies become widely available. EVs, which use twice as many electrical components as traditional vehicles, have been hit especially hard. Many top EV manufacturers have months-long waiting lists for new vehicles. Finding a used one is next to impossible. 

Still, the growing interest in switching shows promise for President Biden’s plans to make EV sales 50% of the U.S. market by 2030. As costs come down, the vehicle transition will likely move even faster. 

“I think we’ll see EV adoption speed up,” says Seth Goldstein, an analyst at Morningstar’s market research firm. “The infrastructure bill signed last year should fund the development of thousands of fast chargers along highways and in the cities, and that should all help boost EV adoption over the next several years. But you know, these things aren’t immediate.”

So is now the best time to go electric? Unfortunately, there is no “one size fits all” answer. However, as charging networks and domestic production improves, it’s clear that EV adoption will help drive our clean energy future.